Glenn Grimes University of Missouri

Publish Date: April 4, 2012

The structure of the pork industry changed dramatically during the 1990s and promises to continue to change in the years ahead. By structural change, we refer to the number and size of operations, who owns them, and how they relate to other firms in the pork chain. Change provides both challenges and opportunities to those individuals who make their living from the industry. Trying to cope with rapid change can quickly become a test of survival. Most of the data for this fact sheet come from USDA publications and industry surveys conducted by the University of Missouri and Iowa State University.

Publish Date: June 3, 2006

The question How and Where is Hog Price Established? is a seemingly simple one. The pricing mechanism for hogs, however, is complex. Prices for hogs, as for other commodities traded in competitive markets, result from the interaction of supply and demand. But a long list of factors affects supply and another long list affects demand. In addition, the precise state of each of the factors and the exact influence on supply and demand are often not fully known at any given time.

Publish Date: June 3, 2006

In the past decade there has been a rapid movement by U.S. hog producers and packers away from selling and buying hogs on the spot market. The decline in spot market sales has been offset by a steady increase in both contractual agreements between producers and packers and in packers raising hogs for slaughter. There are a number of reasons why producers have switched to contracts from spot market sales. First, it simplifies life. It is far easier, especially for larger hog operations, to negotiate a multi-year packer contract than to negotiate the price of every load of hogs. It is easier to arrange and budget transportation when all the hogs go to the same plant. A marketing contract assures shackle space. Perhaps most important, marketing contracts can offer a higher and more stable net price than the spot market.